Jersey Financial Services Commission (JFSC) Trust Company Business (TCB) 2014 report on its 2013 On-Site visit Examination Programme Summary Findings (part 2)

INTRODUCTION

The JFSC have issued their 2014 Summary Findings following its 2013 On-Site Visit Examination Programme.
In this report the JFSC provided an overview and conclusion as follows

JFSC overview and conclusion

The majority of on-site 2013 examinations encompassed a review of
Corporate Governance,
the key person functions and
Critical Anti-Money Laundering and the Countering the Financing of Terrorism (“AMI/CFT”) related systems and controls.
The results of the Commission’s focus in these areas are evident in the ranking of the summary findings arising from the TCB programme and summarised in the remainder of this report.
The Commission seeks to understand the aims and objectives of the business and identify where tensions may exist in meeting the requirements of the regulatory regime.
Such factors and indicators are observed within the “culture” of the organisation but may be more difficult to measure and therefore evidence in an objective manner.
It is entirely feasible that the current continuing trend towards formal monitoring via PEMS over heightened supervision or enforcement action is reflective of the relatively mature interface with the regulatory regime that the trust company business sector has experienced in recent years, with the majority of all businesses having been through the experience of an on-site examination a number of times since the introduction of financial services regulation for trust company business in 2001 and the subsequent supervisory approach.
The Commission noted examples of strong corporate governance which usually included instances where compliance had become part of the overall approach to all aspects of the business.
This was evident where businesses had thought through systems and controls to meet the needs of both their specific chosen markets and the regulatory requirements.
Whilst the Commission has provided examples of some of the pitfalls and difficulties faced by businesses in meeting the regulatory requirements, many of the recommendations made are well received by businesses who continue to develop and integrate their systems and controls.
The Commission will continue to focus its attention on the areas highlighted in this report, which emphasises that businesses will also need to continue to review and enhance their systems and controls and to update their customer records, with particular regard to the AML/CFT regime.